India: Inflation increases in August
September 12, 2022
Inflation came in at 7.0% in August, up from July’s 6.7%. The result exceeded market expectations of a 6.9% rise and was driven by rising prices for food and beverages. Annual average inflation ticked up to 6.2% in August (July: 6.0%). Lastly, consumer prices increased 0.52% from the previous month in August, picking up from July's 0.46% increase.
August’s print broke a streak of three consecutive months of slowing inflation. The pickup in inflation was driven by rising food costs, due to a weaker harvest resulting from below-average monsoon rainfall. Going forward, inflation is set to decelerate in what remains of the year. Price pressures will be weighed on by the recent levy on rice exports and the recent fall in agricultural commodity prices on global markets. Increased grain shipments owing to the opening of sea routes in the Black Sea pose a downside risk.